Production uncertainty at Mirsarai's Economic Zone as gas pipeline not installed even in 8 years
Several companies that have completed factory construction and installed machinery say the absence of gas supply is delaying operations and affecting investment confidence in the country’s largest economic zone.
Highlights:
- Investors face uncertainty as Mirsarai's economic zone still lacks dedicated gas pipeline
- Gas supply issue remains unresolved nearly eight years after development began
- Several factories have completed construction but cannot start production
- Some factories are using LPG as temporary solution
Investors in the Economic Zone under the Bangladesh Export Processing Zones Authority in Chattogram's Mirsarai are facing uncertainty over production plans as the zone still lacks a dedicated gas transmission pipeline, nearly eight years after development work began.
Several companies that have completed factory construction and installed machinery say the absence of gas supply is delaying operations and affecting investment confidence in the country's largest economic zone.
Keep updated, follow The Business Standard's Google news channel
Chinese garment accessories manufacturer SBS Zipper Bangladesh Co Ltd has invested nearly $20 million in setting up a factory in the zone. The company has completed infrastructure development, imported machinery and is preparing to produce 271 million pieces of zippers, sliders, zipper parts, tapes, plastic buttons and related products annually.
However, production remains on hold due to the lack of a gas connection.
"We have not received any confirmation regarding when gas will be supplied. It is no longer possible for us to begin production in June. If gas becomes available, we plan to start operations in July," Lindsey, secretary to the company's general manager, told The Business Standard.
Industry insiders said several other factories are facing similar difficulties. Some have started using liquefied petroleum gas from outside the zone as a temporary solution.
Investors also cite water shortages as a challenge. Sources said the limited water available is saline and has an unpleasant odour, prompting authorities to focus mainly on attracting dry industries that require less water.
Investors also need to secure around 28 approvals from different agencies before setting up factories, which businesses say creates additional hurdles.
According to sources, a dedicated gas transmission pipeline of more than 5 kilometres from the Karnaphuli Gas Distribution Company Limited station at CP Intersection in Mirsarai was originally planned for the zone. The processing zones authority was expected to install a 24-inch pipeline, but the project has not been implemented yet.
A 16-inch pipeline installed by Bashundhara Group for its own economic zone was initially expected to supply gas to the Economic Zone as well. However, that option is no longer available, leaving the issue unresolved.
Engineer Mohammad Anamul Haque, project director of the Bepza Economic Zone, said the Bangladesh Economic Zones Authority has been informed of a gas connection from the relevant agencies.
"Without ensuring utility services, investment momentum cannot be sustained. We have allowed several companies to temporarily use liquefied petroleum gas. Another eight to ten factories will require gas connections in the near future," he told TBS.
However, a process is underway to sign a Memorandum of Understanding between Beza and Bashsundhra Group regarding the use of the pipeline, said sources.
Despite the utility challenges, investment interest continues to grow.
Bepza officials said the lack of vacant plots in Chattogram's two existing EPZs and the zone's proximity to Chittagong Port and Shah Amanat International Airport have made it attractive to investors.
According to Bepza documents, 354 of the zone's 539 industrial plots and one of the two factory buildings have already been allocated to 61 companies. Of them, 12 firms have started operations and exports, while three are preparing to begin exports. Another 32 industrial units are under construction.
As of April, total investment in the zone stood at $90.79 million, while exports reached $45.14 million. The industries have created around 6,000 jobs.
Chinese investors account for the largest share of companies operating in the zone, alongside firms from South Korea, Sri Lanka, the US, the UK, Canada, Singapore, India, the UAE, the Netherlands, Malaysia, Ireland and Bangladesh.
Bepza estimates that once fully implemented, the zone will attract nearly $7 billion in investment and create employment for around 400,000 people.
The 1,138.55-acre economic zone, approved in September 2018 within the National Special Economic Zone in Mirsarai, is the largest economic zone under Bepza. Physical progress of the development project reached 93% by April.
Project Director Anamul said work on the remaining components is progressing and authorities are trying to complete the project within the scheduled timeframe.
